In past most of the companies tried to achieve success by performing their finance and marketing work effectively and bringing improvement in quantitative aspect of the business operations and totally ignoring the qualitative aspect of business. In the correct era due to phenomenon such as globalization and hyper competition the ultimate organization goals can only be achieved through concentrating on both aspects of the business.
HRM is the utilization of company's those qualitative and cognitive abilities that enable the company employees to work both collectively and individually to achieve organization strategic goals. Now a day's all managers at every level of the company must be concerned with human resource management and must make sure that full capacities and potentials of employees are utilized for obtaining company's aim and objective. The realization of the fact that employees of the organization are the most important resource of the organization played a key role in shaping the business practices all over the world and because of this fact countries like Japan and Korea with no material resource gained so much economic welfare in so much little time just by concentrating on their human resource. HRM main focus is aligning the aims of the employees in such manner that each employee contributes his maximum towards the strategic goals of the organization, creating competitive edge over those companies which belongs to the similar industry.
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Like every sector of business HRM performs it duties by following core principles and functions to obtain the ultimate goals of the organization. The HRM functions has evolved tremendously over time and brought some key changes in the business activities by bringing more efficiency and increased productivity. New challenges are arising constantly for the companies and the way world is shaping now there is no sign that these challenges will stop arising soon therefore it is necessary for the organizations to adopt human resource techniques as it provide strong base to overcome these problems and enable to carry smooth transition of business day to day activities.
"Different perspectives on increasing the effectiveness of human resource management (HRM) as a contributor to organizational success is evident in business and management research (Poole and Glenville, 1996)." Effectiveness refers to generating efficiency in daily operations of the organization. There are so many perspectives regarding effectiveness implicated on HRM as demands placed on HRM are evolving all the time because of the increased competitive pressures and search for efficiency in each and every step of the operations.
Human resource has evolved in the last hundred years as a result of the significant changes that occurred in social and economic realities of the time. In the pre-1900 era when there was no concept of big and multinational companies and organizations business was carried on a small scale the human resource phenomenon did not exist and as businesses were on small scale all the issues that occurred related to employees were dealt by the actual owners of the business. In that period emphasis on efficiency was not so much as there was no intense competition prevailing in the market.
As time passed and in the beginning of the 19th century the economic and social system shifted toward industrial revolution which led to large scale manufacturing, and assembly lines. People were plugged into a narrowly defined job, to do it efficiently, and predictably, People were now the interchangeable parts of the system, if a person wears out, a similar person would quickly replace him and placed in the similar position, playing the exact same role.
"Moreover, with the drastic changes in technology, the growth of organizations, the rise of unions and government concern and interventions resulted in the development of personnel departments in the 1920s. At this point, personnel administrators were called 'welfare secretaries' (Ivancevich, 2007)." Personnel departments were needed to cater the needs of the employees of the company. The evolution of personnel department took place in order to find out the solution that can work for both the management and the labor unions. It basically worked on getting the management to see things from the labor perspective and provide them with some benefits like medical and education. It was acting as a separate department to handle employee complaints, record keeping, wage management and other employee-related issues.
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Around the 1930s to 1940s Efficiency experts and more highly evolved HR processes were introduced. There was a shift in focus from worker's efficiency and companies started to create efficiency through work satisfaction. "When commitment is high, employees' values are aligned with the organization and he or she wants to do what is necessary for firm survival and success (Mowday, Porter, & Steers, 1982)." Many corporations started to increase the employee benefit as they saw it as a method of increasing the motivation, retention and acquiring the best possible output from employee. There was evidence that management and labors found settlement for desired mediums of communication in the form of company unions. Organization began to emphasize improved working conditions and various benefits as a means of motivating employees. All employment functions, such as recruitment, training, compensation, and benefits, had to be with complete efficiency.
By 1945, the union powers were increasing day by day which resulted in unnecessary announced and unannounced labor strikes which were detrimental to the economy particularly manufacturing industry these strikes were in huge number and so many numbers of working days were lost due to which number of factories got closed. It was found that there is a serious need of administrative discipline so personnel management was introduced. At that time people belonging to such activities started to realize that these activities should be separated from other managerial functions and must be given a status of separate professional managerial function. Computer technology emerged for the purpose of storing and retrieving employee information. This department was given the responsibility to cater the staffing needs which involve the process of hiring and firing individuals other than salary payment.
In 1960's due to passing of various Acts like Civil Right Act and Safety and Health Act, new legislation was introduced towards employment, training, and payments criteria, equal pay opportunities, employment protection etc. Companies started to place more emphasize on personnel management. Most of the organizations started to recognize it as a separate department working to ensure that their employees are working according to the requirement of the organization goal and making sure that they are properly taken care of so that no violation of human right is caused in order to avoid various lawsuits. All employment functions, such as recruitment, training, compensation, and benefits, had to be in accordance with the rules and regulations as required by the law and had to be done with complete efficiency keeping in mind that competition is increasing with the passage of time.
Change in world was occurring fast and promptly and by 1970s people started to recognize the effects of globalization and human relations. Business realities were changing quickly and many enterprises were facing mergers and acquisitions. Company started to diversify their investments rather than holding them in single location in order to avoid huge losses. Companies were facing issues like coping with fast changing world, how to create motivation and deal with human relations. So deal with the matter in hand they improved personnel relation to human resource management. "The rebranding for the term Personnel Management to Human Resource Management was argued as due to the evolvement and changes in the world of management and therefore a new term would seem appropriate to take new ideas, concepts and philosophies of human resources (Noon, 1992)." It was the time in which personnel management were started to be recognized as Human Resources Departments and the new discipline of human resource management was established. This department main focus was employee selection and placement, deciding payroll accordingly, pension and benefits management for motivational purposes, control of intake and training procedures to cater the continuous changing environment etc.
The purpose of Human Resource Management continues to grow 1980s. In other words, effective and correct practices in HRM started show great results for the organization and once companies started to achieve the desired goals there was a significant growth of HR Departments, and as to keep up with the requirements the use of computer technology also increased. A new trend of outsourcing some of the responsibilities like computer assistance of HR department was introduced in the market because of the ever growing role of Human Resource activities. Many separate companies started to assist the burden of HR department for the purpose of achieving the desired activities efficiently.
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During 1990s the emergence of Asian market as a result of globalization and technological breakthroughs the establishment of multinational organizations particularly Japanese firm took the rest of the world by surprise and when is European and American firm looked for the immediate and quick success of Asia they once again it was found that due to effective management of workforce the Japanese firm were more productive and efficient than western firm. "From strategic management and organizational economics, the resource based theory of competitive advantage focuses on the role of internal resources like employees play in developing and maintaining a firm's competitive capabilities (Wright et al., 1994)." HR Department carried out very systematic approaches like job design, performance management, and compensation according to skills and working efficiency, measured standards for minimum performance etc. these practices resulted in establishing such an efficient workforce that organizations started to recognize their workers as human capital.
At the beginning of 21st century multinational enterprises converted into a true and complete modern organization. Advancement in technology and extremely fast internet introduced a new dimension of 24/7 available society and e-commerce was introduced. "It is the fit between the HR architecture and the strategic capabilities and business processes that implement strategy that is the basis of HR's contribution to competitive advantage (Becker and Huselid, 2006)." Advancement in technology and increased role efficient display of Human capital added a lot of value to the organization particularly in terms of product and services and companies started to consider their Human Resource more like a strategic partner instead of a separate department. Companies started to recognize their Human Capital as one of the most valuable asset. Furthermore By the year 2000 nearly all major corporations have established Human Resource Information System (HRIS) with associated management and technical staffs. Although HIRS was in used from 1940s for record keeping but now it was introduced as a new revelation because of the technological advancement. Now this HRIS is designed to support and control activities of human resources management. It provides its assistance in activities like the planning procedure, encouraging team work, administrative issues and key strategic actions like critical decision-making.
This brings us to the current period and Human Resource is still somewhat evolving phenomenon, business realities are still changing and transform into a one global economy where what happens at one part of world is felt at the other part of the world. As realities are changing so does the issues confronting the Human Resources specialist. They are now facing issues like constantly changing and uncertain business situations, always focus on finding the best talent with required capabilities, dealing with various cultures because of the diversity of work force, provide consulting services and the most difficult challenge of perform as an effective Internal strategic partner to the organization.
HR specialist and researches are now of the opinion that changes in the Human Resource will result either by further advancement in technology or by the effective management of human capital, especially advancement in technology which will be the main point of how the Human Resource activities will be undertaken in the future. Technology makes Human Resource free from all the redundant administrative work as it carry all the hard information and can provide it on timely and important stages of business activities when required. The search for effective talent management has huge significance for HR specialist. In other words, talent management is a company's ability to attract, retain and motivate employees. Talent management on the other hand has always been a part of HR's agenda, combination of demographic and market forces will bring new requirement of generating a workforce that provides true competitive advantage.
In past there always had been some sort of turf of war between various departments working for the company. Therefore top management always had to think twice before making any sort of change in the organizations. Through most of its evolution, HRM has had always tried to deliver administrative and some sort of caretaker activities for organization. With passage of time the use of technology significantly increased and decreased the time required for administrative duties, and in the future many HR professionals may find it difficult as to how to cope with these changes and will have to redefine their jobs and may resist the change to an HRIS. Therefore HRM professional must transform and redefine their jobs by adding values such as strategy development and initiation. This also involves learning new ways and skills and rethinking the way the HR department is organized, performs and delivers its services to the organization. As skills of HRM professional will enhance technology will not be taken as a replacement of the department but more likely as an aid to their activities.
In the end it can be said that the role of HR management has continued to evolve and change throughout its life. But the main purpose and main challenge of HRM has remained the same which include delivering transactional and administrative services while keeping costs at minimum and as low as possible. Besides providing the basic skills of recruitment and retention, employee development, motivation and appraisal growth of important skill like the ability to provide activities like internal consulting skills has become an important and essential part of delivering the total HR promise. Development of such skill has made the organization realize the role of HR as more of a trusted advisor. HR has aligned the strategic goals of the organization to the long term business goals. With the help of operational excellence and innovation, HR has solved long term issues and problems through relying on self-service, efficiency, and scalability. It can be concluded that without the assistance of Human Resource Management the establishment and evolution of modern business world would have been impossible and business would have suffered greatly in coping with issues like globalization and as to how to manage the most important resource of any business its "employees".
As according to Benjamin Franklin,